What is cryptocurrency?
Cryptocurrency is a form of payment that can be exchanged online for goods and services. Many companies have issued their own currencies, often called tokens, and these can be traded specifically for the good or service that the company provides.
Cryptocurrencies work using a technology called blockchain. Blockchain is a decentralized technology spread across many computers that manages and records transactions. Part of the appeal of this technology is its security
How many cryptocurrencies are there?
Nearly 15,000 different cryptocurrencies are traded publicly, according to CoinMarketCap.com, a market research website. And cryptocurrencies continue to proliferate. The total value of all cryptocurrencies on Nov. 29 2021, was more than $2.5 trillion, having fallen off an all-time high above $2.9 trillion weeks earlier. The total value of all bitcoins, the most popular digital currency, was pegged at about $1.1 trillion.
Why is crypto so popular?
Cryptocurrencies appeal to their supporters for a variety of reasons. Here are some of the most popular:
Supporters see cryptocurrencies such as bitcoin as the currency of the future and are racing to buy them now, presumably before they become more valuable.
Some supporters like the fact that cryptocurrency removes central banks from managing the money supply, since over time these banks tend to reduce the value of money via inflation.
Other supporters like the technology behind cryptocurrencies, the blockchain, because it’s a decentralized processing and recording system and can be more secure than traditional payment systems.
Some speculators like cryptocurrencies because they’re going up in value and have no interest in the currencies’ long-term acceptance as a way to move money.
Is crypto a good investment?
Cryptocurrencies are very volatile; many crypto coins have increased in value exponentially. Their future is still somewhat speculative though. Cryptocurrencies generate no cash flow, so for you to profit, someone has to pay more for the currency than you did.
However, the same argument could be made for gold.
Are cryptocurrencies legal?
There’s no question that they’re legal in the United States, though China has essentially banned their use, and ultimately whether they’re legal depends on each individual country. Also be sure to consider how to protect yourself from fraudsters who see cryptocurrencies as an opportunity to bilk investors. As always, buyer beware.
How much can I make investing in cryptocurrency?
Unfortunately there’s not a simple answer to this question. People have made a 10,000% return investing in some coins, while others have lost all of their investment. I personally implement a strategy that positions me to make a 40+% return every month.
What is the strategy that you talk about?
I utilize charts and indicators to decide when to enter and exit (buy and sell) my position (investment). My strategy involves hard rules to follow depending on if the current market sentiment is bull vs. bear.
What are indicators?
Indicators are formulas built to analyze and forecast market moves. (See resource page.)